Iolans will pay more for water and electricity, City Council members decided Monday. THE WATER utility reserves, meanwhile, remain inadequate to meet the annual $600,000 loan payments to the Kansas Department of Health and Environment, approved about 10 years ago to fund construction of Iola’s water plant. SPEAKING OF… ONE OF the funds the Council left alone was $45,000 earmarked for Van Scoyoc Associates, a federal lobbying firm under the city’s employ. THE COUNCIL also:
Council members voted, 5-1, to increase water rates by 3 percent, effective Aug. 1, while raising meter fees for residential electric customers $2.50 a month.
The increases are necessary, City Administrator Carl Slaugh said, because reserve funds for both utilities have shrunk dangerously low.
The electric reserve fund — which ideally would have between $3 million and $6 million — is down to $1 million in the bank, Slaugh said.
“For a fund with projected expenditures of … $1 million a month, that leaves little reserve to handle regular cash flow.”
Slaugh cited a number of factors for the low reserves.
For one, a cool summer and warm winter in 2014 meant customers bought less electricity, and thus brought less in revenue to city coffers.
Additionally, the city increased transfers from the electric reserves to Iola’s general fund to cover a budget imbalance for the Fire Department and Emergency Medical Service.
In addition to the meter fee hike, the city will increase peak demand electric rates for Iola’s two industrial customers, Gates Corporation and Russell Stover Candies, from $3 to $5 per kilowatt hour.
The maneuver will increase utility costs for both customers by about 5 percent, Slaugh said.
The higher fees and industrial rates will generate an additional $300,000.
Councilman Austin Sigg, who voted against the rate hike, said spending out of the fund remained his big concern.
“It seems like we are trying to adjust our revenue for our budget, rather than adjusting the budget to our revenue,” he said. “I’d like to see us spend less money.”
Council members Donald Becker and Aaron Franklin were absent.
The city, for generations, has used its utility reserves to supplement Iola’s general fund, in order to keep its property taxes low.
The water fund operated at a deficit from 2008 to 2011, and rate increases then have helped, but not enough to bring the fund to a healthy level, Slaugh said.
Even with the increases, Slaugh noted more work to balance budgets would be necessary.
“If no changes are made to expenditures, it’d take us 10 years to bring up our reserves to a minimum of what we need,” he said.
Council members, who also looked at Iola’s 2016 budget, which needs to be approved and finalized by mid-August.
Based on projected revenues for 2016, and going solely off budget requests by department heads, the budget was $595,698 out of balance, Slaugh said.
Slaugh subsequently cut out some requests, earmarking $374,468 in possible reductions.
Many of the cuts dealt with deferring equipment replacement.
Council members eventually signed off on all but $45,000 of those cuts.
The Council did not indicate how to make up the remaining $200,000 deficit, either through increased property taxes, utility transfers or additional spending cuts.
Slaugh has recommended Iola discontinue its relationship with Van Scoyoc.
Council members have been more reluctant to do so, noting the firm has led to federal grants and other opportunities.
In fact, earlier in Monday’s meeting, the Council approved a citizens committee to work with Van Scoyoc about seeking federal grants aimed at improving drainage along North State Street, improving curb and gutter throughout town and pushing the Environmental Protection Agency to proceed with soil cleanup after the city was declared a Superfund site several years ago. Committee members are Jerry Dreher (chairman), Hannah Barclay, Steve French, Tony Godfrey, Ryan Sparks and Job Springer.
“The purpose of this board is to work independently of the council and to report back to us,” Wicoff said. “That way they’re not influenced by city council.”
— Approved a request from Thrive Allen County to open Riverside Park’s Recreation Community Building for campers Sept. 11-13 as part of the Portland Alley Pedal Fest. Still to be worked out are a potential beer garden because a licensed vendor and partner are needed.
— Purchased a new patrol car for the Iola Police Department from Twin Motors Ford for $26,900. While the price was second highest of four bids received, Council members said it was close enough to the low bid — $25,528 — to favor the local car dealer.
— Agreed to accept, if offered, a pair of properties from Iolan John Wallace Jr. at 802 N. Cottonwood St. and 517 N. Sycamore St.
While Wallace still is uncertain whether he wants to deed them to the city, the Council acknowledged both properties are connected to Coon Creek and could benefit the city if the creek ever needs to be modified.
— Ratified an economic development service agreement with Allen County, Iola Industries and Thrive Allen County. The agreement has been in place for the past 2 1/2 years, but was never formally signed, Slaugh noted.
The city, county and Iola Industries pay $20,000 each to Thrive for the service.
— Tabled discussions on whether Iola should tighten restrictions on cell phone usage among motorists. Council members noted Councilman Aaron Franklin requested the matter be discussed. However, Franklin was absent from Monday’s meeting.
— Dropped discussions of increasing the city’s transient guest tax, a fee assessed by local hotels. Proceeds generated from the guest tax then are forwarded to the Iola Area Chamber of Commerce, Allen County Historical Society and other groups dealing with tourism.
— Accepted the resignations of Terry Skaggs and Kenneth Thompson and agreed to rehire Tristan Roegner to the Fire Department after Roegner had a change of heart from his previous intention to resign.
Iolans will pay more for water, electricity
